Insurance Australia Group Ltd Financial impact of Tropical Cyclone Debbie and lower FY17 reported insurance margin guidance
Financial impact of Tropical Cyclone Debbie and lower FY17 reported insurance margin guidance: Insurance Australia Group Ltd (ASX: IAG) stock fell over 0.34% on April 05, 2017 after the company released an update giving out the financial impact of Tropical Cyclone Debbie. The group also revised FY17 reported insurance margin guidance. IAG has estimated that it would incur a net natural peril claims cost of approximately $140 million from Tropical Cyclone Debbie, which is consistent with the maximum event exposure indicated in the perils update provided on March 06, 2017. IAG’s businesses have received approximately 4,300 claims as at April 04, 2017 for mainly the property damage in relation to the Tropical Cyclone Debbie. Moreover, IAG has upgraded its expectation for FY17 net natural peril claim costs to $850 million, as compared to the previously held assumption of $680 million. This equates to approximately 200 basis points at the reported insurance margin level. Therefore, IAG has lowered its FY17 reported insurance margin guidance range, from 12.5-14.5% to 10.5-12.5%.
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